‘Customer Protection’ For Wall Street? GOP Still Doesn’t Get It

June 17, 2014

Isaiah J. Poole

Drinking too much of the Wall Street gin caused a power-intoxicated House Majority Leader Eric Cantor to swerve into a political crash.

Just as we’d think teenagers watching vivid videos of tragic car wrecks would help persuade them to not drink and drive, you would think that seeing Cantor fall off his perch would cause his fellow House Republicans to approach their handling of Wall Street interests with a new level of sobriety.

Not this week, apparently.

The next major bill that House Republicans are planning to take up is something called “The Customer Protection and End User Relief Act.” But before you think this bill (H.R. 4413) is a noble effort by House Republicans to take care of the interests of ordinary Americans as they deal with the powers that be, remember what the then-chairman of the House Financial Services Committee, Rep. Spencer Bachus (R-Ala.), said in 2010: “Washington and the regulators are there to serve the banks.”

In other words, when Republicans in Washington talk about “customers,” they’re not talking about you.

The “customers” in this bill are really Wall Street derivatives traders – yes, the same bunch whose shady dealings helped blow up the economy in 2008. Congress has to reauthorize the operations of the Commodities Futures Trading Commission, the agency that polices the commodities and derivatives markets. But rather than focusing on putting reasonable restraints on Wall Street traders, the bill is preoccupied with putting constraints on the CFTC to regulate the traders, according to Americans for Financial Reform, an organization fighting for progressive Wall Street reforms.

In a letter to Congress, the organization says the bill “would have a severe negative impact on the Commodity Futures Trading Commission (CFTC) and its ability to police commodities and derivatives markets crucial to our economy.” In particular, it would load the CFTC down with requirements such as additional cost-benefit analyses of proposed regulatory actions that would “greatly expand Wall Street’s ability to dispute any agency action in court, tilting the regulatory playing field still further in their favor.”

The CFTC already has more work to do as a result of the Dodd-Frank financial reform bill Congress passed in response to the Wall Street financial meltdown. But the House is not giving the CFTC new resources to fulfill these new responsibilities, even though CFTC Mark Wetjen testified during a congressional hearing that “at current funding levels, the agency is unable to adequately fulfill the mission given to it by Congress.”

One reason House Republicans think they can get away with this is that there is not a lot of noise around this bill, even from House Democrats. It’s somewhat technical, and on the surface removed from the day-to-day experience of most working people. And for people like small farmers whose livelihoods depend on the smooth functioning of derivatives and commodities markets, there are legitimate concerns that Congress should be trying to balance.

But, as a memo released Monday by the Greenberg Quinlan Rosner political research group said, “Republican primary voters in the Richmond suburbs are in good company with voters across the country fed up with Wall Street and frustrated with Washington’s complicity in protecting Wall Street’s too-big-to-fail bankers and their high risk gambling and egregious law breaking.”

A new national survey of 1,000 likely 2014 voters, the group said, “makes it clear that voters not only distrust Wall Street and big banks, but want strong, serious reform. Voters believe financial markets are ‘rigged for insiders,’ and ‘hurt everyday Americans.'”

According to the poll:

• 64 percent believe “the stock market is rigged for insiders and people who know how to manipulate the system.”

• 60 percent favor “stricter regulation on the way banks and other financial institutions conduct their business,” and just 28 percent oppose.

House Republicans continue to act in ways that are contrary to the interests of America’s populist majority. They may mask it in Orwellian language, but Republicans will increasingly find themselves on dangerous ground as more working-class people discover that the “customer” they are sworn to protect is Wall Street, not them. It’s the job of progressive lawmakers and activists to hasten that reckoning.

Recent Stories by Isaiah J. Poole

The issue of stagnant working-class wages, which outgoing EPI President Larry Mishel has worked so hard to make prominent, is being co-opted to sell GOP tax cuts that will primarily benefit the wealthy. Even so, he counts this as progress.

Doug Jones's victory in Alabama belongs to the voters, who rose up from the grassroots in a new movement to restore voting rights and met the challenge of keeping a homophobe, racist and accused pedophile out of the U.S. Senate.

Homelessness is on the rise, and the GOP's tax and budget plans will make the housing crisis worse. A People's Hearing on Housing with Congress members in Washington, DC highlighted these problems and solutions that match their scale.

About Isaiah J. Poole

Isaiah J. Poole is communications director of People's Action, and has been the editor of OurFuture.org since 2007. Previously he worked for 25 years in mainstream media, most recently at Congressional Quarterly, where he covered congressional leadership and tracked major bills through Congress. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. His work has put him at the front lines of ideological battles between progressives and conservatives. He also served as a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.